High Court of KeralaDivision BenchAppeal dismissed; Tribunal’s order sustained; i...
The Oriental Insurance Co. Ltd. v. Nirarudeen, Mary Yohannan and Balakrishnan Nair
Case / Petition Number:MFA No. 288 of 2003 (A); OPMV 1232/1996
Case Details & Bench
- Court
- High Court of Kerala
- Hon'ble Judges
- J.B. Koshy
- K. Hema
- Judgment Date
- 2008-02-06
- Court Decision / Holding
- Appeal dismissed. The High Court upheld the Tribunal’s finding and held that the insurer failed to prove that absence of a valid driving licence at the relevant time caused the accident or that such absence constituted a fundamental breach of the policy. The insurer’s wider arguments based on Section 149(2)(a)(ii) and earlier two‑member bench decisions were distinguished in light of Swaran Singh and the third‑party nature of the claim; the appellant’s burden to establish breach and its connection to the accident was not satisfied. The Tribunal’s order directing no liability disowned or modified remains intact.
- Final Disposition
- Appeal dismissed; Tribunal’s order sustained; insurer held to have not established breach or its causal connection to the accident.
Parties to the Case
Appellants / Petitioners
- The Oriental Insurance Co. Ltd.
Respondents
- NiraruDeen (NiraruDeen, S/o Meera Sahib)
- Mary Yohannan
- Balakrishnan Nair
Legal Representation & Advocates
Counsels for Petitioners
- • Sri. George Cherian (Thiruvalla)
Counsels for Respondents
- • Sri Nagaraj Narayanan
- • Sri Nair Ajay Krishnan
- • Sri Sai Jo Hassan
- • Sri A. S. Sabu
- • Sri Rajan Velloth
Case Synopsis & Summary
This is an appeal by the Oriental Insurance Company challenging an order of the Motor Accidents Claims Tribunal, Attingal, in a third‑party liability claim under the Motor Vehicles Act. The insurer contends that the driver of the insured vehicle did not possess a valid driving licence on the date of the accident (2 May 1996), the licence having expired before the incident and renewed only on the same date. Relying on Supreme Court authorities, the insurer argues that a breach of a policy condition (holding a valid licence) justifies repudiation under section 149(2)(a)(ii). The Tribunal’s reasoning is examined against the backdrop of Narcinva V. Kamat and others v. Alfredo Antonio Doe Martins and others, which insist that the insurer bears the burden to prove any breach, and that mere absence or invalidity of a licence is not, by itself, conclusive. The judgment also cites Jitendra Kumar v. Oriental Insurance Co. Ltd. and others, holding that the insurer cannot repudiate a duly insured owner’s claim solely on the driver’s lack of licence if the driver did not contribute to the accident. The Court reiterates the Swaran Singh framework, noting that Chapter XI aims to provide relief to victims and that an insurer must prove breach and its relevance to the accident’s cause. In this case, no proven breach or causal link is established; the appeal is dismissed and the Tribunal’s order stands. The decision underscores that absence of licence must be shown to have contributed to the accident before relief is denied, and that where a breach is not proven, liability remains with the insurer and the insured as applicable.
Provisions of Law Cited
Motor Vehicles Act, 1988, Section 149(2)(a)(ii)Motor Vehicles Act, 1988, Section 149Motor Vehicles Act, 1988, Sections 163-A and 166Chapter XI of the Motor Vehicles Act, 1988
Legal Doctrines & Maxims
- Rule of main purpose
- Fundamental breach
- Burden of proof on insurer
- Social welfare objective of Chapter XI of the Motor Vehicles Act, 1988
- Mere absence or invalid driving licence is not a definitive defence unless breach is proven to have contributed to the accident
Submissions & Arguments
Contentions of Appellants / Petitioners
The appellant insurer contends that the driver was driving without a valid licence on the date of the accident. It relies on policy terms and Section 149(2)(a)(ii) to argue that breach of the driving licence condition permits repudiation of liability. It cites Narcinva V. Kamat and Jitendra Kumar to emphasize the insurer’s burden to prove breach and the necessity that such breach be linked to the accident.
Contentions of Respondents
The respondents submit that there is no proven breach or causal link showing that absence of a valid licence contributed to the accident. They rely on Swaran Singh and related jurisprudence to argue that mere absence or invalidity of a licence cannot automatically defeat third‑party liability; the insurer must prove breach and its significance, and even if breach is established, the liability may still be maintained unless the breach is fundamental and contributed to the accident.
Cited Precedents (6)
| Case Name | Citation | Treatment | Explanation |
|---|---|---|---|
| Narcinva V. Kamat and another v. Alfredo Antonio Doe Martins and others | 1985 ACJ 397 SC | Positive | Used to support the principle that the insurer bears the burden of proving breach and that absence of a license alone is not automatically fatal to a third‑party claim; the test is who would fail if no evidence is led. |
| Jitendra Kumar v. Oriental Insurance Co. Ltd. and another | ((2003) 6 SCC 420) | Positive | Held that an insurer cannot repudiates a claim solely on the ground that the driver did not hold a valid licence if the driver did not contribute to the accident. |
| National Insurance Co. Ltd. v. Swaran Singh and others | AIR 2004 SC 1531 | Positive | Summarised the law that compulsory insurance aims to protect victims; insurer may raise defenses but must prove breach and its relevance; the rule of main purpose and fundamental breach concepts are laid down. |
| Oriental Insurance Co. Ltd. v. Meena Variyal and others | (2007) 5 SCC 428 | Distinguished | Two‑member bench decision holding absence of licence as policy violation was distinguished because the present claimant is a third party; Swaran Singh remains controlling law. |
| National Insurance Co. Ltd. v. Laxmi Narain Dhut | (2007) 3 SCC 700 | Distinguished | Similar to Meena Variyal, distinguished; the three‑member bench approach following Swaran Singh is preferred for third‑party claims. |
| United India Insurance Co. Ltd. v. Lehru & ors. | (AIR 2003 SC 1292) | Positive | Supports that where there is third‑party liability, the amount may be deposited by the insurer and recovered from the insured as per the Apex Court. |
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Extracted Judgment Text
Exact text extracted from official judgment records.
## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
**PRESENT :**
**THE HONOURABLE MR. JUSTICE J.B.KOSHY**
**&**
**THE HONOURABLE MRS. JUSTICE K.HEMA**
**WEDNESDAY, THE 6TH FEBRUARY 2008 / 17TH MAGHA 1929**
**MFA.No. 288 of 2003(A)**
**--------------------------------OPMV.1232/1996 of MOTOR ACCIDENT CLAIMS TRIBUNAL, ATTINGAL**
**....................**
## **APPELLANT: THIRD RESPONDENT/RESPONDENT CLAIMANTS**
**---------------------**
**THE ORIENTAL INSURANCE CO.LTD., TRIVANDRUM REPRESENTED BY ITS ASST.MANAGER, REGIONAL OFFICE, ERNAKULAM NORTH, KOCHI-18**
**BY ADV. SRI.GEORGE CHERIAN (THIRUVALLA)**
## **RESPONDENTS: RESPONDENTS 1 AND 2**
**-----------------------**
**1. NIRARUDEEN, S/O MEERA SAHIB, MEERA SAHIB HOUSE, NEAR ELECTRICITY OFFICE, MADAVOOR, MADAVOOR PALLICKAL P.O., TRIVANDRUM.**
**2. MARY YOHANNAN, CHAMODALLI, ETTICHAVAL, RANNY, PATHANAMTHITTA.**
**3. BALAKRISHNAN NAIR S/O. JANARDHANAN NAIR AYITHALAPAROOR VEEDU, AYITHALA, PAZHAVANGADI, RANY, PATHANAMTHITTA.**
**BY ADV. SRI.NAGARAJ NARAYANAN - R1 SRI.NAIR AJAY KRISHNAN SRI.SAIJO HASSAN SRI.A.S.SABU**
**SRI.RAJAN VELLOTH**
**THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 06/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
## **J.B. Koshy & K.Hema, JJ. -------------------------------------M.F.A. No. 288 of 2003 --------------------------------------Dated this the 6th day of February, 2008**
## **Judgment**
## **Koshy,J.**
This appeal is filed by the insurance company. Contention raised by the insurance company was that the driver of the offending vehicle insured by it had no valid driving licence. As per the charge sheet the earlier licence expired before the date of accident, that is, 2.5.1996. It was renewed only on 2.5.1996. Therefore, according to the appellant, on the date of accident, there was no driving licence. The Apex Court in Narcinva V. Kamat and another v. Alfredo Antonio Doe Martins and others (1985 ACJ 397 SC) held as follows:
"12. It is contended on behalf of the insurance company that the second appellant did not have a valid driving licence. It is the insurance company which complains that there has been a breach of one of the important terms of the contract of insurance as evidenced by the policy of insurance (the whole of which was not shown to us) and that the second appellant who was shown to be driving the vehicle at the relevant time, did not have a valid driving licence to drive the pick-up van. The insurance
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**M.F.A.No. 288/2003**
company complains of breach of a term of contract which would permit it to disown its liability under the contract of insurance. If a breach of a term of contract permits a party to the contract to not to perform the contract, the burden is squarely on that party which complains of breach to prove that the breach has been committed by the other party to the contract. The test in such a situation would be who would fail if no evidence is led. The language and the format in which issue Nos.7 and 8 have been cast by the Tribunal clearly casts the burden of proof on the insurance company. Not an iota of evidence has been led by the insurance company to show that the second appellant did not have a valid driving licence to drive the vehicle."
In this case, the driver had valid licence before the date of accident and there is no case to establish that absence of the driving licence was the cause of accident. In Jitendra Kumar v. Oriental Insurance Co. Ltd. and another ((2003) 6 SCC 420) the Apex Court held as follows:
"9. .................... The question then is: can the Insurance Company repudiate a claim made by the owner of the vehicle which is duly insured with the Company, solely on the ground that the driver of the vehicle who had nothing to do with the accident did not hold a valid licence? The answer to this question, in our opinion, should be in the negative. Section 149 of the Motor Vehicles Act, 1988 on which reliance was placed by the State Commission, in our opinion, does not come to the aid of the Insurance Company in repudiating a claim where the driver of the vehicle had not contributed in any manner to the accident.
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**M.F.A.No. 288/2003**
Section 149 (2) (a) (ii) of the Motor Vehicles Act empowers the Insurance Company to repudiate a claim wherein the vehicle in question is damaged due to an accident to which driver of the vehicle who does not hold a valid driving licence is responsible in any manner. It does not empower the Insurance Company to repudiate a claim for damages which has occurred due to acts to which the driver has not, in any manner, contributed i.e., damages incurred due to reasons other than the act of the driver."
No evidence was also adduced by the insurance company to show that absence of driving licence is the cause of accident. Except relying on the police records, there is no evidence to show that even though such a charge was made that he was convicted for the offence. Burden is on the insurance company to prove that there is violation of the policy of insurance. (See: National Insurance Company Ltd. v. Swaran Singh and others - AIR 2004 SC 1531). A three-member Bench of the apex Court after extensively considering all the earlier decisions, summarised the law as follows:
"105. (i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.
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**M.F.A.No. 288/2003**
(ii) Insurer is entitled to raise a defence in a claim petition filed under section 163-A or section 166 of the Motor Vehicles Act, 1988 inter alia in terms of section 149 (2) (a) (ii) of the said Act.
(iii) The breach of policy condition e.g. disqualification of driver or invalid driving licence of the driver, as contained in sub-section (2) (a) (ii) of section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time.
(iv) The insurance companies are, however, with a view to avoid their liability must not only establish the available defence (s) raised in the said proceedings but must also establish 'breach' on the part of the owner of the vehicle; the burden of proof wherefore would be on them.
(v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case.
(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not
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**M.F.A.No. 288/2003**
be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply 'the rule of main purpose' and the concept of 'fundamental breach' to allow defences available to the insured under section 149 (2) of the Act. .................................." (rest not very relevant)
The two-member Bench decision in Oriental Insurance Co. Ltd. v. Meena Variyal and others ((2007) 5 SCC 428) and National Insurance Co. Ltd. v. Laxmi Narain Dhut ((2007) 3 SCC 700) holding that absence of licence is a violation of policy condition were cited by the learned counsel for the insurance company. But, in those cases, the three-member Bench decision in Swaran Singh's case (supra) was followed, but, the court distinguished the above decision as injured was an employee of the owner and passenger and he was not a third party. In this case, claimant is a third party and the tribunal found that there was no violation of the policy condition on the basis of evidence adduced. It is a finding of fact. Even if contention of the appellant is accepted, the amount due to the third party liability has to be ordered to be deposited by the insurer and recovered from the insured as held by the Apex Court in United India Insurance Co. Ltd. v. Lehru & ors. (AIR 2003 SC 1292).
6
## **M.F.A.No. 288/2003**
Notice is not served on the second respondent, the insured in this case so far. So, without serving notice, we cannot issue such a direction. In any event, appellant was not able to prove that there is violation of the policy condition.
In the above circumstances, we dismiss the appeal.
**J.B.Koshy Judge K. Hema Judge**
vaa
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**M.F.A.No. 288/2003**
**J.B. KOSHY AND K.HEMA ,JJ.**
------------------------------------M.F.A. No. 288 of 2003 -------------------------------------
**Judgment**
Dated:6th February, 2008